Willowood Lakes Ltd v Board of Trustees of the Kingston Port Workers Superannuation Fund
| Jurisdiction | Jamaica |
| Judge | SMITH, J.A.: , HARRIS, J.A. , SMITH, J.A. (Ag) , SMITH, J.A. |
| Judgment Date | 02 July 2009 |
| Neutral Citation | JM 2009 CA 60 |
| Judgment citation (vLex) | [2009] 7 JJC 0207 |
| Court | Court of Appeal (Jamaica) |
| Date | 02 July 2009 |
CIVIL PROCEDURE - Statements of case - Order striking out - Whether claim disclosed no reasonable ground for bringing the claim - Civil Procedure Rules 2002, Part 26 - Whether judge erred in law in striking out the appeal
This is an appeal against the decision of Brooks J. delivered on August 7, 2007 in which he granted the Respondent's application to strike out the Appellant's statement of case and awarded costs to the Respondent.
The Appellant is a limited liability company duly incorporated under the laws of Jamaica with offices at 4 Holborn Road, Kingston 10. The Respondent Board of Trustees was appointed under and by virtue of the Port Workers (Superannuation Fund) Act and is the registered holder of parcels of land comprised in Certificate of Titles registered at Vol. 962 Folio 49 and Vol. 984 Folio 127 of the Register Book of Titles (the property). The property is located on the Norman Manley Boulevard, Negril, Westmoreland.
Background Facts
By a Lease Agreement dated August 1, 2000, the Respondent leased to the Appellant the said property for an initial period of three (3) years.
Clause 5 (4) of the Lease provided:
"The landlord shall grant to the tenant an extension in the term of the lease for at least a further three (3) years on expiry of the existing lease under the same terms and conditions of the existing lease and for such other subsequent terms as the parties may mutually agree".
Clause 6 (3) provides for the reference of any dispute in respect of the lease to an Arbitrator in accordance with the Arbitration Act.
Three (3) months before the expiry of the lease, the Appellant advised the Respondent of its decision to renew the lease. The Respondent refused to grant the extension. Consequently a dispute arose.
The parties agreed to appoint Dr. the Honourable Lloyd Barnett, O.J., an Attorney-at-Law, as the sole Arbitrator to settle the dispute.
After all the documentation required to commence the hearing was submitted to the Arbitrator but before the hearing commenced, the Respondent offered to sell the property to the Appellant at market value. The offer was accepted. The parties agreed that the market value or sale price would be based on a valuation to be prepared by D.C. Tavares & Finson Realty Ltd. (the Valuator). It was also agreed that DunnCox, the Respondent's Attorneys-at-Law, would instruct the Valuator to prepare a market appraisal of the unimproved land and an appraisal of the total value of the land.
In October, 2005, the valuation was completed. It was discovered by the parties that the valuation did not contain an appraisal of the unimproved market value of the land. This deficiency was pointed out to the Valuator who promised to prepare an addendum with the omitted information.
However, in light of the parties' agreement for sale, they agreed to amend the original Terms of Reference given to the Arbitrator. The Arbitrator was provided with new Terms of Reference concerning the unimproved value of the said property.
The Arbitration Proceedings
Under the revised Terms of Reference the Arbitrator was informed that the Appellant had agreed to purchase the property. Accordingly, the Arbitrator was asked to:
(1) Fix the sale price of the said property based on his interpretation of the Valuation Reports prepared by D.C. Tavares & Finson Realty Company Limited for the purposes of establishing the market price of the property;
(2) Award that the Appellant is to pay the said sale price within a stated period, failing which the Claimant will be entitled to reenter and take possession of the property and the Appellant will surrender the said property to the Claimant without any further claim against the Claimant, save and except for any entitlement arising under paragraph 3 hereof;
(3) In the event that the Claimant decides to take over the building and other improvements to the property, as it is entitled to do or not to do, the Arbitrator to determine whether the Claimant is to be required to compensate the Appellant for the value of its improvements of the aforesaid property upon its surrender under paragraph 2 above and if so make a finding as to the amount of such compensation to be paid to the Appellant upon surrender of the said property to the Claimant in the event the Appellant fails to pay the sale price fixed by the Arbitrator within the period stated by the Arbitrator, as provided under paragraph 2 above; and
(4) Consider and determine whether the improvements/works done by the Appellant on the property should be taken into consideration in arriving at the sale price under paragraph 1 above.
The parties agreed that the terms of the lease should be taken into account and the following additional documents were submitted for the Arbitrator's perusal:
(1) Valuation Report dated October 24, 2005 and prepared by D.C. Tavares & Finson Realty Ltd.
(2) Addendum to Valuation Report of October 24, 2005 prepared by D.C. Tavares & Finson Realty Ltd. dated October 31, 2005.
(3) Copy letter dated October 31, 2005 from D.C. Tavares & Finson Realty Ltd. to DunnCox.
(4) Copy letter dated October 31, 2005 from DunnCox to D.C. Tavares & Finson Realty Ltd.
(5) Copy Bills of Quantities for Construction of Entertainment Complex at Willowood Lakes Limited dated March 2001 and prepared by Melvin Ashwood.
The learned Arbitrator, in a closely considered decision, made the following award:
(1) The sale price is fixed at US$2,225,000.00.
(2) The Respondent (now the Appellant) shall pay to the Claimant the said sale price as follows:
(1) 15% on or before July 31, 2006.
(2) the balance on or before November 30, 2006.
(3) The Respondent shall remain liable to pay the rental under the lease until completion of the sale.
(4) The said sale price shall be reduced by US$150,000 being the value of the buildings and amenities for which the Respondent is entitled to be compensated.
(5) The Respondent shall not be entitled to an abatement of the purchase price or the payment of any compensation for "site works' which relate to making the land buildable.
(6) Time shall be of the essence in respect of the Respondent's obligation to pay the deposit and balance of the purchase price and on its failure to comply with this obligation the Claimant shall be entitled to cancel the sale, whereupon the Claimant will be under an obligation to pay the said sum of US$150,000 less any arrears of rental to the Respondent.
(7) The Respondent shall prepare a Form of Sales Agreement embodying the terms of this award and submit it to the Arbitrator for approval.
The Application to Set Aside the Award
The Appellant was not satisfied with the arbitration award. Consequently, on January 24, 2007 the Appellant filed a Fixed Date Claim in the Supreme Court seeking to nullify or set aside the Arbitrator's Award. In this Claim the Appellant sought inter alia:
(i) A declaration that the Arbitrator erred in fixing the sale price of the unimproved value of the land at US$2,225,000.00.
(ii) An order fixing the sale price at which the Appellant is to purchase the said land from the Respondent.
(iii) A declaration that the Arbitrator failed to consider properly the several valuation reports and in particular the Addendum for the Appraisal Report dated October 24, 2005.
(iv) A declaration that the Arbitrator erred in his finding that the sum of US$150,000.00 was "the value of the buildings and amenities for which the Appellant is entitled to be compensated".
(v) A declaration that the sum stated in (ivj above should be US$950,000.00
(vi) An order that the Respondent shall compensate the Appellant in the sum of US$950,000.00 should the Appellant fail to pay the sale price as fixed by the Court.
(vii) A declaration that the learned Arbitrator failed to consider properly the effect of clause 6 (3) of the Lease Agreement dated August 1, 2000.
Application to Strike Out Appellant's Statement of Case for Setting Aside the Award
On June 18, 2007 the Respondent filed a Notice of Application for Court Orders to strike out the Appellant's statement of case. The grounds on which this application was made were:
(1) The Claimant's (now the Appellant's) statement of case did not disclose any reasonable ground for bringing a claim.
(2) The Claimant's statement of case failed to disclose any basis either under section 12 (2) of the Arbitration Act or under the Court's inherent jurisdiction for the setting aside of the Arbitration Award.
Faced with this formidable challenge to its claim the Appellant on June 27, 2008 filed an Amended Fixed Date Claim Form. In paragraph 1 of this amended claim, the Appellant averred that the Award was bad on its face. In paragraphs 2 and 3 it is asserted that the Arbitrator "misconducted himself and/or fell into error by failing to consider properly" the several valuation reports (paragaph 2) and the Bills of Quantities (paragraph 3).
Apart from these specific averments the statement of case essentially remained the same. The amendment was clearly an attempt to bring it within the purview of the Court's inherent power to set aside an award and section 12 (2) of the Arbitration Act. This subsection states:
"Where an arbitrator or umpire has misconducted himself or an arbitration or award has...
To continue reading
Request your trial